There are very heavy spare capacities built in them for 'war times'. These are located in remote areas due to developmental issues, follow the Govt. Directives of Reservation, Taxes, etc, truthfully. The OFB has done Us well under the circumstances.
It needs to upgrade its technologies, quality of the products, efficiencies, adherence to delivery schedules, customer satisfaction, aging workforce, etc, like DPSUs and Civil Sector do. Investments needed to upgrade them are huge. MOD can't afford to fail them, and follow the line of 'Indian Defence Industry' critics for whatever motivation. These should stay but as 'flags of efficiency'. You could consider existing from certain horizontals, but carefully. It is the strategic sector You would be tampering with.
Mr LK Behera's Article in the IDSA is valuable. He analyses the reasons behind the poor performance of the Indian Ordnance factories (OFs) and recommends measures to revitalize them. To achieve this, the author identifies six core areas pertaining to OFs. After identifying the problems in these areas he goes on to suggest measures so that the functioning of the Ordnance Factories can be improved. Pse read the complete Article on
Brigadier (Retired) Sukhwindar Singh
(A Global Solution for Offsets)
Credit: In Arrangement with the IDSA, http://www.idsa.in/, A Think Tank of India on Matters Defence.